In a significant legal development, the Bombay High Court on Tuesday imposed a four-week stay on a lower court’s order that directed the filing of an FIR against former Securities and Exchange Board of India (SEBI) chairperson, Madhabi Puri Buch, and five other officials. The order from the special court, which has now been stayed, alleged involvement in stock market fraud and regulatory violations.
Justice Shivkumar Dige of the Bombay High Court, presiding over the matter, criticized the special court’s decision for its lack of substantive detail and mechanical issuance. He remarked that the special court had not provided adequate reasoning or specified the roles of the individuals accused, leading to the stay of the order pending a more detailed examination.
The controversy centers around the directions given on March 1 by the special court to the Anti-Corruption Bureau (ACB) to initiate an FIR concerning the 1994 listing of a company on the Bombay Stock Exchange (BSE), which allegedly involved financial fraud and regulatory misconduct.
The high court’s stay came after Madhabi Puri Buch, along with three current whole-time SEBI directors—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—and two BSE officials, Managing Director and CEO Sundararaman Ramamurthy, and former chairman Pramod Agarwal, challenged the special court’s directive. These petitions argue that the special court acted arbitrarily and did not follow legal protocols in its decision-making process.
The complainant, media reporter Sapan Shrivastava, alleges that the officials engaged in widespread financial misconduct, breaches of regulation, and corruption. In light of these serious accusations, Justice Dige has granted Shrivastava four weeks to file an affidavit in response to the petitions, with the case set to receive further hearing thereafter.
